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How many shares of common stock were outstanding throughout the year?

1) 250000
2) 350000
3) 450000
4) 550000

1 Answer

7 votes

Final answer:

The information provided indicates that the Darkroom Windowshade Company has 100,000 shares of common stock outstanding, not the higher figures listed in the question's options. To change top management, a majority vote is needed; investors 1 and 2 combined with investor 3 would have the minimum majority to vote for a change. However, investors 1 and 2 alone cannot be certain of always controlling the company without forming a larger coalition.

Step-by-step explanation:

The question asks about the number of shares of common stock outstanding throughout the year for the Darkroom Windowshade Company. However, based on the information provided, there seems to be a discrepancy. The listed options for the number of shares outstanding are 250,000; 350,000; 450,000; and 550,000, but according to the reference provided, the company has 100,000 shares of stock outstanding. Therefore, none of the options provided match the information given.

To address the second part of the question regarding how many investors it would take to vote to change the company's top management, one needs to calculate a majority share. As the company has 100,000 shares outstanding, more than 50,000 shares would need to vote in favor to have a majority. If we look at the number of shares each investor holds, we can calculate that investors 1 and 2 combined have 38,000 shares (20,000 from investor 1 and 18,000 from investor 2). To reach a majority, they would need to team up with at least investor 3, who holds 15,000 shares, to surpass the 50,000 threshold. Together, investors 1, 2, and 3 have 53,000 shares. However, to be certain of always getting their way in how the company is run, investors 1 and 2 would need to build a coalition with enough shareholders to always hold a majority of the votes in case of any conflicts or split decisions among shareholders.

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